Spyderco

Manufacturing Manager Tom Koenig makes a point of staying on the cutting edge of the knife industry.

Founded in 1976 by Sal and Gail Glesser, the Spyderco company began as a reseller of knife sharpeners.

"They used to travel around the country to sell a sharpening product at home improvement and hardware shows," Koenig explains, "but they were never quite happy with the quality, so Sal started tinkering with the design."

This tinkering led to the development of the first original Spyderco product, the Tri-Angle Sharpmaker, which Koenig says is still one of the company's top-selling items more than 40 years later. "That product really helped launch the company," he adds, "and from there, they decided to come up with a pocket knife."

Spyderco released its first folding knife in 1981, and it was unlike any previously seen in the market. "Back then, all folding pocket knives had what was called a nail nick," Koenig says. To open the blade, the user would need to insert his or her thumbnail, "and it would tear it up. It just wasn't user-friendly, so Sal spent a lot of time trying to figure out how to make a pocket knife easier to open."

Glesser's solution was the Trademark Round Hole, a patented thumbhole in the knife blade that allows the user to open the pocket knife with one hand. "It was a game changer in the industry," say Koenig, "and it is in almost every one of our knives today."

Spyderco's catalog now spans 300 SKUs. The company works with strategic partners in Asia to manufacture its value-oriented knives, and 30 percent of products -- primarily the high-end models -- are handcrafted in the company's 50,000-square-foot facility in Golden. This includes the best-selling Para Military 2 folding knife.

"We have more than 200 inline SKUs as far as folding knives go," Koenig adds. "We have about 18 inline SKUs for non-folding knives, 27 for fixed blades, seven flippers, and three restricted knives. The numbers change as we adjust our product line every year."

Spyderco knives and accessories are sold in over 60 different countries, and Koenig says the company tries to address all possible sales channels to get their product to the consumer. "We sell to wholesalers," he explains. "We also sell to online resellers such as Amazon and have our own online sales and a retail store on site."

The company's U.S.-manufactured goods have grown by 20 to 40 percent annually in recent years, while overall sales have seen 5 to 10 percent growth. Koenig forecasts similar sales increases for 2018. He says Spyderco's employee count grew about 10 percent last year.

Knife making is a very labor-intensive process, with the blade alone requiring multiple steps from laser cutting and pre-grinding to CNC machining and heat treating before it's moved along to mass finishing, pre-finishing, hand finishing, sharpening, and engraving. "At each of those steps, there is at least one person handling the blade," Koenig explains.

Sharpening, which Koenig says is a particularly physically demanding step in the process, requires the use of highly skilled craftsmen. "It takes about six months for an individual to learn the process, and because of the physical nature of it, they only want to do it for about two years," he adds. "We were putting in 20 percent of our time as training, and that wasn't a recipe for success. So, about four or five years ago, we bought a robot cell. It took about nine months to get it online to do the quality of edges that we want and has been a real success story for us."

The robot cell now sharpens about 80 percent of Spyderco's U.S.-made blades. The company also utilizes a pick and place robot to load and unload work pieces from various machines.

Koenig thinks robots will play a big part in the manufacturing industry in the future, at both large and small companies. "I'm not an insider in the robot industry, but the current supply seems to be pretty close to the demand," he muses. "I think once enough robot manufacturers come online and current demand is fulfilled, we'll see prices come down on robotics to where maybe the smaller shop or smaller factory will try it, especially in conjunction with the development of collaborative robots that can work side by side with people without specialty cages. The integration will get easier."

Challenges: "Because of our location, filling jobs has been difficult," Koenig says. "Unemployment is really low in Denver and it is tough for us to get qualified employees, especially for second and third shift manufacturing."

Opportunities: "We try to be a very innovative company," says Koenig. "We typically launch between 20 and 40 new products each year, and I think that will always be an opportunity for Spyderco. We also practice continuous quality improvement and are always refining our existing products. That's a real opportunity as well because it can lead to increased market demand."

Koenig also notes expansion of the company's "Exclusive Program" through which knife resellers can choose the blade and handle materials to be used in an existing model for a limited run that will be exclusively sold through that reseller's channels. "This program has been extremely popular because the reseller has a little bit more control over their product and they aren't competing with 500 other avenues," he adds.

Needs: "Every year, we look at what new equipment we want to add," Koenig says. "We do a good job of picking off a few big items every year, and we've already accomplished that. Our needs now are really just finding good, qualified people for our second and third shift."